Privacy-Enhancing Technology

Definition ∞ Privacy-Enhancing Technology, or PET, encompasses a range of tools and techniques designed to protect personal data and user privacy during data collection, processing, and sharing. These technologies allow for the use of data while minimizing or eliminating the exposure of sensitive information. Examples include zero-knowledge proofs, homomorphic encryption, and differential privacy, which enable computation or verification without revealing underlying data. PETs are becoming increasingly vital in digital asset systems to balance transparency with individual confidentiality.
Context ∞ The discussion surrounding Privacy-Enhancing Technology often highlights its critical role in achieving regulatory compliance, particularly with data protection laws like GDPR. In the blockchain space, PETs are crucial for developing scalable and private decentralized applications, addressing the inherent transparency of public ledgers. A critical future development involves the standardization and broader adoption of these technologies, making them more accessible and efficient for developers and users seeking to safeguard their digital information.